IC 6-3.1-10
Chapter 10. Enterprise Zone Investment Cost Credit
IC 6-3.1-10-1 "Enterprise zone" defined
Sec. 1. As used in this chapter, "enterprise zone" means an
enterprise zone created under IC 5-28-15. As added by P.L.9-1986, SEC.8. Amended by P.L.4-2005, SEC.56.
IC 6-3.1-10-1.7 "Pass through entity" defined
Sec. 1.7. As used in this chapter, "pass through entity" means:
(1) a corporation that is exempt from the adjusted gross income
tax under IC 6-3-2-2.8(2);
(2) a partnership;
(3) a limited liability company; or
(4) a limited liability partnership. As added by P.L.57-1996, SEC.1.
IC 6-3.1-10-2 "Qualified investment" defined
Sec. 2. As used in this chapter, "qualified investment" means the
purchase of an ownership interest in a business located in an
enterprise zone if the purchase is approved by the Indiana economic
development corporation under section 8 of this chapter. As added by P.L.9-1986, SEC.8. Amended by P.L.379-1987(ss),
SEC.8; P.L.4-2005, SEC.57.
IC 6-3.1-10-2.5 "SIC Manual" defined
Sec. 2.5. As used in this chapter, "SIC Manual" refers to the
current edition of the Standard Industrial Classification Manual of
the United States Office of Management and Budget. As added by P.L.379-1987(ss), SEC.9. Amended by P.L.24-1995,
SEC.23.
IC 6-3.1-10-3 "State tax liability" defined
Sec. 3. As used in this chapter, "state tax liability" means a
taxpayer's total tax liability that is incurred under IC 6-3-1 through
IC 6-3-7 (the adjusted gross income tax), as computed after the
application of the credits that, under IC 6-3.1-1-2, are to be applied
before the credit provided by this chapter. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-4 "Taxpayer" defined
Sec. 4. (a) As used in this chapter, "taxpayer" means any
individual that has any state tax liability.
(b) Notwithstanding subsection (a), for a credit for a qualified
investment in a business located in an enterprise zone in a county
having a population of more than one hundred five thousand
(105,000) but less than one hundred ten thousand (110,000),
"taxpayer" includes a pass through entity. As added by P.L.9-1986, SEC.8. Amended by P.L.24-1995, SEC.24;
P.L.57-1996, SEC.2; P.L.170-2002, SEC.23.
IC 6-3.1-10-5 "Transfer ownership" defined
Sec. 5. As used in this chapter, "transfer ownership" means to
purchase existing investment in a business, including real property,
improvements to real property, or equipment. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-6 Credit for qualified investment; amount
Sec. 6. (a) A taxpayer is entitled to a credit against the taxpayer's
state tax liability for a taxable year if the taxpayer makes a qualified
investment in that taxable year.
(b) The amount of the credit to which a taxpayer is entitled is the
percentage determined under section 8 of this chapter multiplied by
the price of the qualified investment made by the taxpayer during the
taxable year. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-6.5 Pass through entity; credit
Sec. 6.5. (a) If a pass through entity is entitled to a credit under
section 6 of this chapter but does not have state tax liability against
which the tax credit may be applied, an individual who is a
shareholder, partner, or member of the pass through entity is entitled
to a tax credit equal to:
(1) the tax credit determined for the pass through entity for the
taxable year; multiplied by
(2) the percentage of the pass through entity's distributive
income to which the shareholder, partner, or member is entitled.
(b) The credit provided under subsection (a) is in addition to a tax
credit to which a shareholder, partner, or member of a pass through
entity is otherwise entitled under this chapter. However, a pass
through entity and an individual who is a shareholder, partner, or
member of the pass through entity may not claim more than one (1)
credit for the same investment. As added by P.L.57-1996, SEC.3.
IC 6-3.1-10-7 Carryover of excess credit
Sec. 7. (a) If the amount determined under section 6(b) of this
chapter for a taxpayer in a taxable year exceeds the taxpayer's state
tax liability for that taxable year, the taxpayer may carry the excess
over to the following taxable years. The amount of the credit
carryover from a taxable year shall be reduced to the extent that the
carryover is used by the taxpayer to obtain a credit under this chapter
for any subsequent taxable year.
(b) A taxpayer is not entitled to a carryback or refund of any
unused credit. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-8 Qualifying for credit; request for determination; findings;
certification of credit percentage; application of credit on transfer
of ownership
Sec. 8. (a) To be entitled to a credit, a taxpayer must request the
Indiana economic development corporation to determine:
(1) whether a purchase of an ownership interest in a business
located in an enterprise zone is a qualified investment; and
(2) the percentage credit to be allowed.
The request must be made before a purchase is made.
(b) The Indiana economic development corporation shall find that
a purchase is a qualified investment if:
(1) the business is viable;
(2) the business has not been disqualified from enterprise zone
incentives or benefits under IC 5-28-15;
(3) the taxpayer has a legitimate purpose for purchase of the
ownership interest;
(4) the purchase would not be made unless a credit is allowed
under this chapter; and
(5) the purchase is critical to the commencement, enhancement,
or expansion of business operations in the zone and will not
merely transfer ownership, and the purchase proceeds will be
used only in business operations in the enterprise zone.
The Indiana economic development corporation may delay making
a finding under this subsection if, at the time the request is filed
under subsection (a), an urban enterprise zone association has made
a recommendation that the business be disqualified from enterprise
zone incentives or benefits under IC 5-28-15 and the board of the
Indiana economic development corporation has not acted on that
request. The delay by the Indiana economic development corporation
may not last for more than sixty (60) days.
(c) If the Indiana economic development corporation finds that a
purchase is a qualified investment, the department shall certify the
percentage credit to be allowed under this chapter based upon the
following:
(1) A percentage credit of ten percent (10%) may be allowed
based upon the need of the business for equity financing, as
demonstrated by the inability of the business to obtain debt
financing.
(2) A percentage credit of two percent (2%) may be allowed for
business operations in the retail, professional, or
warehouse/distribution codes of the SIC Manual.
(3) A percentage credit of five percent (5%) may be allowed for
business operations in the manufacturing codes of the SIC
Manual.
(4) A percentage credit of five percent (5%) may be allowed for
high technology business operations (as defined in
IC 5-28-15-1).
(5) A percentage credit may be allowed for jobs created during
the twelve (12) month period following the purchase of an
ownership interest in the zone business, as determined under the
following table:
JOBS CREATED PERCENTAGE
Less than 11 jobs 1%
11 to 25 jobs 2%
26 to 40 jobs 3%
41 to 75 jobs 4%
More than 75 jobs 5%
(6) A percentage credit of five percent (5%) may be allowed if
fifty percent (50%) or more of the jobs created in the twelve
(12) month period following the purchase of an ownership
interest in the zone business will be reserved for zone residents.
(7) A percentage credit may be allowed for investments made
in real or depreciable personal property, as determined under
the following table:
AMOUNT OF INVESTMENT PERCENTAGE
Less than $25,001 1%
$25,001 to $50,000 2%
$50,001 to $100,000 3%
$100,001 to $200,000 4%
More than $200,000 5%
The total percentage credit may not exceed thirty percent (30%).
(d) If all or a part of a purchaser's intent is to transfer ownership,
the tax credit shall be applied only to that part of the investment that
relates directly to the enhancement or expansion of business
operations at the zone location. As added by P.L.9-1986, SEC.8. Amended by P.L.379-1987(ss),
SEC.10; P.L.289-2001, SEC.13; P.L.4-2005, SEC.58.
IC 6-3.1-10-9 Claiming credit
Sec. 9. To receive the credit provided by this chapter, a taxpayer
must claim the credit on the taxpayer's annual state tax return or
returns in the manner prescribed by the department of state revenue.
The taxpayer shall submit to the department of state revenue the
certification of the percentage credit by the Indiana economic
development corporation and all information that the department of
state revenue determines is necessary for the calculation of the credit
provided by this chapter and for the determination of whether an
investment cost is a qualified investment cost. As added by P.L.9-1986, SEC.8. Amended by P.L.4-2005, SEC.59.
IC 6-3.1-10
Chapter 10. Enterprise Zone Investment Cost Credit
IC 6-3.1-10-1 "Enterprise zone" defined
Sec. 1. As used in this chapter, "enterprise zone" means an
enterprise zone created under IC 5-28-15. As added by P.L.9-1986, SEC.8. Amended by P.L.4-2005, SEC.56.
IC 6-3.1-10-1.7 "Pass through entity" defined
Sec. 1.7. As used in this chapter, "pass through entity" means:
(1) a corporation that is exempt from the adjusted gross income
tax under IC 6-3-2-2.8(2);
(2) a partnership;
(3) a limited liability company; or
(4) a limited liability partnership. As added by P.L.57-1996, SEC.1.
IC 6-3.1-10-2 "Qualified investment" defined
Sec. 2. As used in this chapter, "qualified investment" means the
purchase of an ownership interest in a business located in an
enterprise zone if the purchase is approved by the Indiana economic
development corporation under section 8 of this chapter. As added by P.L.9-1986, SEC.8. Amended by P.L.379-1987(ss),
SEC.8; P.L.4-2005, SEC.57.
IC 6-3.1-10-2.5 "SIC Manual" defined
Sec. 2.5. As used in this chapter, "SIC Manual" refers to the
current edition of the Standard Industrial Classification Manual of
the United States Office of Management and Budget. As added by P.L.379-1987(ss), SEC.9. Amended by P.L.24-1995,
SEC.23.
IC 6-3.1-10-3 "State tax liability" defined
Sec. 3. As used in this chapter, "state tax liability" means a
taxpayer's total tax liability that is incurred under IC 6-3-1 through
IC 6-3-7 (the adjusted gross income tax), as computed after the
application of the credits that, under IC 6-3.1-1-2, are to be applied
before the credit provided by this chapter. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-4 "Taxpayer" defined
Sec. 4. (a) As used in this chapter, "taxpayer" means any
individual that has any state tax liability.
(b) Notwithstanding subsection (a), for a credit for a qualified
investment in a business located in an enterprise zone in a county
having a population of more than one hundred five thousand
(105,000) but less than one hundred ten thousand (110,000),
"taxpayer" includes a pass through entity. As added by P.L.9-1986, SEC.8. Amended by P.L.24-1995, SEC.24;
P.L.57-1996, SEC.2; P.L.170-2002, SEC.23.
IC 6-3.1-10-5 "Transfer ownership" defined
Sec. 5. As used in this chapter, "transfer ownership" means to
purchase existing investment in a business, including real property,
improvements to real property, or equipment. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-6 Credit for qualified investment; amount
Sec. 6. (a) A taxpayer is entitled to a credit against the taxpayer's
state tax liability for a taxable year if the taxpayer makes a qualified
investment in that taxable year.
(b) The amount of the credit to which a taxpayer is entitled is the
percentage determined under section 8 of this chapter multiplied by
the price of the qualified investment made by the taxpayer during the
taxable year. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-6.5 Pass through entity; credit
Sec. 6.5. (a) If a pass through entity is entitled to a credit under
section 6 of this chapter but does not have state tax liability against
which the tax credit may be applied, an individual who is a
shareholder, partner, or member of the pass through entity is entitled
to a tax credit equal to:
(1) the tax credit determined for the pass through entity for the
taxable year; multiplied by
(2) the percentage of the pass through entity's distributive
income to which the shareholder, partner, or member is entitled.
(b) The credit provided under subsection (a) is in addition to a tax
credit to which a shareholder, partner, or member of a pass through
entity is otherwise entitled under this chapter. However, a pass
through entity and an individual who is a shareholder, partner, or
member of the pass through entity may not claim more than one (1)
credit for the same investment. As added by P.L.57-1996, SEC.3.
IC 6-3.1-10-7 Carryover of excess credit
Sec. 7. (a) If the amount determined under section 6(b) of this
chapter for a taxpayer in a taxable year exceeds the taxpayer's state
tax liability for that taxable year, the taxpayer may carry the excess
over to the following taxable years. The amount of the credit
carryover from a taxable year shall be reduced to the extent that the
carryover is used by the taxpayer to obtain a credit under this chapter
for any subsequent taxable year.
(b) A taxpayer is not entitled to a carryback or refund of any
unused credit. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-8 Qualifying for credit; request for determination; findings;
certification of credit percentage; application of credit on transfer
of ownership
Sec. 8. (a) To be entitled to a credit, a taxpayer must request the
Indiana economic development corporation to determine:
(1) whether a purchase of an ownership interest in a business
located in an enterprise zone is a qualified investment; and
(2) the percentage credit to be allowed.
The request must be made before a purchase is made.
(b) The Indiana economic development corporation shall find that
a purchase is a qualified investment if:
(1) the business is viable;
(2) the business has not been disqualified from enterprise zone
incentives or benefits under IC 5-28-15;
(3) the taxpayer has a legitimate purpose for purchase of the
ownership interest;
(4) the purchase would not be made unless a credit is allowed
under this chapter; and
(5) the purchase is critical to the commencement, enhancement,
or expansion of business operations in the zone and will not
merely transfer ownership, and the purchase proceeds will be
used only in business operations in the enterprise zone.
The Indiana economic development corporation may delay making
a finding under this subsection if, at the time the request is filed
under subsection (a), an urban enterprise zone association has made
a recommendation that the business be disqualified from enterprise
zone incentives or benefits under IC 5-28-15 and the board of the
Indiana economic development corporation has not acted on that
request. The delay by the Indiana economic development corporation
may not last for more than sixty (60) days.
(c) If the Indiana economic development corporation finds that a
purchase is a qualified investment, the department shall certify the
percentage credit to be allowed under this chapter based upon the
following:
(1) A percentage credit of ten percent (10%) may be allowed
based upon the need of the business for equity financing, as
demonstrated by the inability of the business to obtain debt
financing.
(2) A percentage credit of two percent (2%) may be allowed for
business operations in the retail, professional, or
warehouse/distribution codes of the SIC Manual.
(3) A percentage credit of five percent (5%) may be allowed for
business operations in the manufacturing codes of the SIC
Manual.
(4) A percentage credit of five percent (5%) may be allowed for
high technology business operations (as defined in
IC 5-28-15-1).
(5) A percentage credit may be allowed for jobs created during
the twelve (12) month period following the purchase of an
ownership interest in the zone business, as determined under the
following table:
JOBS CREATED PERCENTAGE
Less than 11 jobs 1%
11 to 25 jobs 2%
26 to 40 jobs 3%
41 to 75 jobs 4%
More than 75 jobs 5%
(6) A percentage credit of five percent (5%) may be allowed if
fifty percent (50%) or more of the jobs created in the twelve
(12) month period following the purchase of an ownership
interest in the zone business will be reserved for zone residents.
(7) A percentage credit may be allowed for investments made
in real or depreciable personal property, as determined under
the following table:
AMOUNT OF INVESTMENT PERCENTAGE
Less than $25,001 1%
$25,001 to $50,000 2%
$50,001 to $100,000 3%
$100,001 to $200,000 4%
More than $200,000 5%
The total percentage credit may not exceed thirty percent (30%).
(d) If all or a part of a purchaser's intent is to transfer ownership,
the tax credit shall be applied only to that part of the investment that
relates directly to the enhancement or expansion of business
operations at the zone location. As added by P.L.9-1986, SEC.8. Amended by P.L.379-1987(ss),
SEC.10; P.L.289-2001, SEC.13; P.L.4-2005, SEC.58.
IC 6-3.1-10-9 Claiming credit
Sec. 9. To receive the credit provided by this chapter, a taxpayer
must claim the credit on the taxpayer's annual state tax return or
returns in the manner prescribed by the department of state revenue.
The taxpayer shall submit to the department of state revenue the
certification of the percentage credit by the Indiana economic
development corporation and all information that the department of
state revenue determines is necessary for the calculation of the credit
provided by this chapter and for the determination of whether an
investment cost is a qualified investment cost. As added by P.L.9-1986, SEC.8. Amended by P.L.4-2005, SEC.59.
IC 6-3.1-10
Chapter 10. Enterprise Zone Investment Cost Credit
IC 6-3.1-10-1 "Enterprise zone" defined
Sec. 1. As used in this chapter, "enterprise zone" means an
enterprise zone created under IC 5-28-15. As added by P.L.9-1986, SEC.8. Amended by P.L.4-2005, SEC.56.
IC 6-3.1-10-1.7 "Pass through entity" defined
Sec. 1.7. As used in this chapter, "pass through entity" means:
(1) a corporation that is exempt from the adjusted gross income
tax under IC 6-3-2-2.8(2);
(2) a partnership;
(3) a limited liability company; or
(4) a limited liability partnership. As added by P.L.57-1996, SEC.1.
IC 6-3.1-10-2 "Qualified investment" defined
Sec. 2. As used in this chapter, "qualified investment" means the
purchase of an ownership interest in a business located in an
enterprise zone if the purchase is approved by the Indiana economic
development corporation under section 8 of this chapter. As added by P.L.9-1986, SEC.8. Amended by P.L.379-1987(ss),
SEC.8; P.L.4-2005, SEC.57.
IC 6-3.1-10-2.5 "SIC Manual" defined
Sec. 2.5. As used in this chapter, "SIC Manual" refers to the
current edition of the Standard Industrial Classification Manual of
the United States Office of Management and Budget. As added by P.L.379-1987(ss), SEC.9. Amended by P.L.24-1995,
SEC.23.
IC 6-3.1-10-3 "State tax liability" defined
Sec. 3. As used in this chapter, "state tax liability" means a
taxpayer's total tax liability that is incurred under IC 6-3-1 through
IC 6-3-7 (the adjusted gross income tax), as computed after the
application of the credits that, under IC 6-3.1-1-2, are to be applied
before the credit provided by this chapter. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-4 "Taxpayer" defined
Sec. 4. (a) As used in this chapter, "taxpayer" means any
individual that has any state tax liability.
(b) Notwithstanding subsection (a), for a credit for a qualified
investment in a business located in an enterprise zone in a county
having a population of more than one hundred five thousand
(105,000) but less than one hundred ten thousand (110,000),
"taxpayer" includes a pass through entity. As added by P.L.9-1986, SEC.8. Amended by P.L.24-1995, SEC.24;
P.L.57-1996, SEC.2; P.L.170-2002, SEC.23.
IC 6-3.1-10-5 "Transfer ownership" defined
Sec. 5. As used in this chapter, "transfer ownership" means to
purchase existing investment in a business, including real property,
improvements to real property, or equipment. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-6 Credit for qualified investment; amount
Sec. 6. (a) A taxpayer is entitled to a credit against the taxpayer's
state tax liability for a taxable year if the taxpayer makes a qualified
investment in that taxable year.
(b) The amount of the credit to which a taxpayer is entitled is the
percentage determined under section 8 of this chapter multiplied by
the price of the qualified investment made by the taxpayer during the
taxable year. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-6.5 Pass through entity; credit
Sec. 6.5. (a) If a pass through entity is entitled to a credit under
section 6 of this chapter but does not have state tax liability against
which the tax credit may be applied, an individual who is a
shareholder, partner, or member of the pass through entity is entitled
to a tax credit equal to:
(1) the tax credit determined for the pass through entity for the
taxable year; multiplied by
(2) the percentage of the pass through entity's distributive
income to which the shareholder, partner, or member is entitled.
(b) The credit provided under subsection (a) is in addition to a tax
credit to which a shareholder, partner, or member of a pass through
entity is otherwise entitled under this chapter. However, a pass
through entity and an individual who is a shareholder, partner, or
member of the pass through entity may not claim more than one (1)
credit for the same investment. As added by P.L.57-1996, SEC.3.
IC 6-3.1-10-7 Carryover of excess credit
Sec. 7. (a) If the amount determined under section 6(b) of this
chapter for a taxpayer in a taxable year exceeds the taxpayer's state
tax liability for that taxable year, the taxpayer may carry the excess
over to the following taxable years. The amount of the credit
carryover from a taxable year shall be reduced to the extent that the
carryover is used by the taxpayer to obtain a credit under this chapter
for any subsequent taxable year.
(b) A taxpayer is not entitled to a carryback or refund of any
unused credit. As added by P.L.9-1986, SEC.8.
IC 6-3.1-10-8 Qualifying for credit; request for determination; findings;
certification of credit percentage; application of credit on transfer
of ownership
Sec. 8. (a) To be entitled to a credit, a taxpayer must request the
Indiana economic development corporation to determine:
(1) whether a purchase of an ownership interest in a business
located in an enterprise zone is a qualified investment; and
(2) the percentage credit to be allowed.
The request must be made before a purchase is made.
(b) The Indiana economic development corporation shall find that
a purchase is a qualified investment if:
(1) the business is viable;
(2) the business has not been disqualified from enterprise zone
incentives or benefits under IC 5-28-15;
(3) the taxpayer has a legitimate purpose for purchase of the
ownership interest;
(4) the purchase would not be made unless a credit is allowed
under this chapter; and
(5) the purchase is critical to the commencement, enhancement,
or expansion of business operations in the zone and will not
merely transfer ownership, and the purchase proceeds will be
used only in business operations in the enterprise zone.
The Indiana economic development corporation may delay making
a finding under this subsection if, at the time the request is filed
under subsection (a), an urban enterprise zone association has made
a recommendation that the business be disqualified from enterprise
zone incentives or benefits under IC 5-28-15 and the board of the
Indiana economic development corporation has not acted on that
request. The delay by the Indiana economic development corporation
may not last for more than sixty (60) days.
(c) If the Indiana economic development corporation finds that a
purchase is a qualified investment, the department shall certify the
percentage credit to be allowed under this chapter based upon the
following:
(1) A percentage credit of ten percent (10%) may be allowed
based upon the need of the business for equity financing, as
demonstrated by the inability of the business to obtain debt
financing.
(2) A percentage credit of two percent (2%) may be allowed for
business operations in the retail, professional, or
warehouse/distribution codes of the SIC Manual.
(3) A percentage credit of five percent (5%) may be allowed for
business operations in the manufacturing codes of the SIC
Manual.
(4) A percentage credit of five percent (5%) may be allowed for
high technology business operations (as defined in
IC 5-28-15-1).
(5) A percentage credit may be allowed for jobs created during
the twelve (12) month period following the purchase of an
ownership interest in the zone business, as determined under the
following table:
JOBS CREATED PERCENTAGE
Less than 11 jobs 1%
11 to 25 jobs 2%
26 to 40 jobs 3%
41 to 75 jobs 4%
More than 75 jobs 5%
(6) A percentage credit of five percent (5%) may be allowed if
fifty percent (50%) or more of the jobs created in the twelve
(12) month period following the purchase of an ownership
interest in the zone business will be reserved for zone residents.
(7) A percentage credit may be allowed for investments made
in real or depreciable personal property, as determined under
the following table:
AMOUNT OF INVESTMENT PERCENTAGE
Less than $25,001 1%
$25,001 to $50,000 2%
$50,001 to $100,000 3%
$100,001 to $200,000 4%
More than $200,000 5%
The total percentage credit may not exceed thirty percent (30%).
(d) If all or a part of a purchaser's intent is to transfer ownership,
the tax credit shall be applied only to that part of the investment that
relates directly to the enhancement or expansion of business
operations at the zone location. As added by P.L.9-1986, SEC.8. Amended by P.L.379-1987(ss),
SEC.10; P.L.289-2001, SEC.13; P.L.4-2005, SEC.58.
IC 6-3.1-10-9 Claiming credit
Sec. 9. To receive the credit provided by this chapter, a taxpayer
must claim the credit on the taxpayer's annual state tax return or
returns in the manner prescribed by the department of state revenue.
The taxpayer shall submit to the department of state revenue the
certification of the percentage credit by the Indiana economic
development corporation and all information that the department of
state revenue determines is necessary for the calculation of the credit
provided by this chapter and for the determination of whether an
investment cost is a qualified investment cost. As added by P.L.9-1986, SEC.8. Amended by P.L.4-2005, SEC.59.
